TOKYO/DETROIT (Reuters) - Honda Motor Co raised its annual forecast on Wednesday after cost-cuts boosted quarterly profit and said it was concerned that rival Toyota’s huge safety recall might tarnish other Japanese brands.
Toyota, the world’s largest automaker, continued to wrestle with the recall that was prompted by complaints over sticking accelerator pedals, losing U.S. sales and struggling to repair its reputation.
It suffered a sharp drop in U.S. sales last month as the recall and unprecedented sales halt allowed rivals to grab market share.
Honda, although not a beneficiary of Toyota’s woes in January, raised its forecast for the year to March after cost cutting contributed to the strongest quarterly profit in a year-and-a-half.
A Honda executive expressed concern that fallout from Toyota’s crisis might spill over to other car makers.
“Toyota is the front-runner representing Japanese cars,” Honda Executive Vice President Koichi Kondo told reporters. “In that sense, we’re somewhat worried that there may be a knock-on effect on other Japanese brands, but we’ll need a little more time to gauge any impact.”
Unlike rivals General Motors, Hyundai Motors and Ford Motor Co, Honda has not taken aim at Toyota customers.
In the latest blow to its once gold-plated quality image, Toyota said on Wednesday dealers in both the United States and Japan had reported complaints from buyers over the brakes in its new model Prius hybrid.
Toyota has received 77 reports of consumer complaints about the braking issue through dealers in Japan, as well as eight in North America, including one in Canada.
The carmaker has not had any reports of problems in Europe, a Toyota Motor Europe spokeswoman told Reuters.
Toyota pulled eight of its most popular models including the Camry, Corolla and Rav4 from U.S. showrooms in the last week of January following complaints over sticking accelerator pedals.
Toyota’s monthly sales fell 16 percent and its U.S. market share fell to its lowest level since January 2006 as rivals Ford Motor Co and General Motors Corp surged past. Its monthly U.S. sales dropped below 100,000 vehicles for the first time in more than a decade.
“Auto sales and market share is kind of like a high-speed road race and if you get caught up in the gravel on the shoulder you can get passed really fast, and essentially that is what happened to Toyota,” Autoconomy analyst Erich Merkle said.
“Right now we have to find out how long it is going to take them to get back on pavement again,” Merkle said.
As Toyota sales fell, Ford and Hyundai Motor Co emerged as the big winners, each posting 34.8 percent sales gains. Honda’s adjusted sales rose 2.9 percent.
Separately on Wednesday, Toyota’s German rival Volkswagen said it saw a positive mid-term margin of 3-4 percent in the U.S., and 5-6 percent in the long-term.
Volkswagen had on Tuesday set out targets to dethrone Toyota as the world’s top carmaker.
Volkswagen’s total vehicle sales in the U.S. rose an adjusted 53.2 percent in January.
Our Standards: The Thomson Reuters Trust Principles.